Considerations for Solar Photovoltaic (PV) Installations Chad A
RE-10-W Renewable nergy Fueling and Feeding America Through RenewableE Resources
Considerations for Solar Photovoltaic (PV) Installations Chad A. Martin, Renewable Energy Specialist Klein E. Ileleji, Associate Professor & Extension Engineer Agricultural & Biological Engineering Department Purdue University
Introduction What is a solar electric As low-cost photovoltaic cells gain reliability photovoltaic (PV) system? and efficiency, solar-generated electricity is In a photovoltaic system, multiple connected increasingly affordable. On Indiana farms, cells collect sunlight and convert the solar power drives irrigation pivot pump rays directly to electricity. Sunlight and motors, farm building electricity, home semiconductor materials within the cell electricity, and many other applications. interact, generating electrons. The direct Fluctuating energy prices and peak demand current (DC) is converted to usable charges from utility companies could lead alternating current (AC) through an inverter to solar applications gaining even greater that typically is placed within the building or acceptance as a viable approach to energy site where the utility meter is located. cost management. Why install a solar PV system? There are several types of solar energy collection methods. The two most relevant to With any renewable energy system, farms and businesses, which we are focusing intermittency is a challenge and can be a on, are as follows: barrier for “going off the grid” completely. When the sun is not shining enough to 1. Photovoltaic, or PV, systems consist of generate ample power for your energy load cells connected in an array. Usually, such requirements, electrical current is then systems create electricity for individual received from the utility grid. However, in homesteads and farmsteads, or for remote locations, establishing utility service distributed generation. can be cost-prohibitive —thus justifying solar 2. A second type uses a concave solar PV with battery storage. collector to concentrate energy for heat Some people appreciate the independence generation to run a turbine to generate that a solar PV system can provide. Personal electricity. Such concentrated solar systems beliefs or convictions — preserving the finite are typically used for large-scale electricity fossil-fuel resources available on Earth, or generation. reducing air pollution, for example — can be This publication will focus on PV systems factors. Whatever the reasons, it’s important to and provide guidelines to help determine if first research the options, visit with a solar PV such a system is a good investment for your dealer as well as someone who has installed farm, business, or home. one, and speak with your local utility provider. Considerations for Solar Photovoltaic (PV) Installations • RE-10-W
Locating a system for successful electricity generation A well-planned solar PV array is free from shading or obstructions to the sun’s rays for most of the day. Orientation is directly linked to performance. Priority should be given to identifying systems that can be adjusted easily to angle toward the south-facing range, boosting efficiency and reliability. Roofs can be sites for PV panels, shingles or tiles. For urban settings with ground space limitations, PV modules can be On the farm: How do you power, for example, an irrigation pivot pump motor? Solar-generated electricity is one answer. The agricultural placed on covered parking areas and even on shades and industry is finding more ways to use solar power. window awnings. Appropriate sites are numerous; exposure to sunlight is the key. installations in Indiana with retail net metering have a 92% chance of solar being cheaper than grid electricity; Net metering and cost variables residential solar has a 50-50 chance of being break-even. Batteries can be used to store excess electricity that a PV Read Renewable Energy Publication RE-9-W for further system generates. However, battery storage costs can be information on “Economic and policy evaluations of solar prohibitive. That’s why most PV systems near utility power energy for Indiana businesses and residential applications” access are “grid-tied,” and consumers have a net metering by Jung and Tyner (2015). arrangement with the utility. Appropriate sizing of your system When the PV array generates more energy than is By increasing the size and scale of a solar array, the cost consumed by the building or operation, the excess per kilowatt-hour can decrease. For example, factor in electricity can be sent to a utility grid. The utility monitors the capacity of your inverter. Can it handle its maximum how much electric power a PV system generates as well installed capacity, or should two inverter units be as how much the consumer uses. The utility provides a purchased? If the cost of installing a very small unit is the credit to the consumer for excess generation sent to the same as installing a medium-size array, then perhaps it power grid. It is critical that consumers communicate with makes sense to take advantage of the economies of scale. the local utility provider early in the process, long before a solar PV system is installed. Some utilities provide a The economic sizing of your PV system will depend on residential average retail rate in cents/kilowatt-hour. Be whether the utility’s policy is net metering (which pays for sure to identify the net metering policy and account for excess kilowatts not used by the consumer) or net billing this rate before investing in a PV system. Ask whether the (which doesn’t pay for excess kilowatts not used by the rate the utility pays for excess electricity that you generate consumer.) is a retail or a wholesale rate. Also, is there a kilowatt-hour Some net metering policy agreements include a cap on production capacity cap? a utility customer’s kilowatt-hour production. This may Because of the initial investment, a solar PV system is not have a direct impact on the scale of the system you install, cost-competitive with utility-supplied electricity, especially and the rate given beyond the net metering cap could be when the power service is nearby. However, the years to a losing proposition. Additional caps may be placed upon payback for a system investment can be shortened by: some incentives or rebate programs, so check the fine print • net metering or net billing; before making the final decision on the size of your solar • utility-generated power consumption offset; PV installation. It is critical to not oversize the PV system, • peak demand rate avoidance; which produces more electric power than is required to • federal/state grants and loan guarantees; meet the load demand. • depreciation for businesses; Finding an installer • sales tax exemption; property tax exemption; Pricing should not be the sole factor when selecting a • state personal income tax credits; contractor to install a solar PV system. Before choosing, • renewable energy credits. do research on the types of available equipment, suppliers, For agricultural producers, there is an available and installers. You might talk with other solar PV system depreciation benefit that does not apply to residential owners about their installers. Ask them about maintenance or non-business system installations. Farm solar system after the project is completed.
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Your utility company might have a list of installers who (retail or wholesale), and savings from self-generation. have worked on similar projects in the area. Some utilities Then compare your electricity costs — from self-generation have certification requirements for installers. Contact the using PV, to the cost of utility power — and calculate the Solar Energy Industries Association (www.seia.org) to difference. This will help determine how many years before obtain a list of solar service providers. Midwest Renewable you recoup your investment. It also will help to determine Energy Association (MREA) also certifies designers and what percentage of electricity needs you want a PV system installers who work in the Midwest. (www.midwestrenew. to meet. org) Examine past utility bills, demand charges, and the solar When evaluating installers, be prepared. Among the PV production potential of your property. Also, the type of questions you might ask: loads (electrical equipment) and usage should be factored • What grid-tied PV systems or stand-alone systems into the decision because this will affect the sizing and cost have they installed? of your PV system. • How much experience — years in business, number Tax incentives are currently very critical to the economic of installations, training programs completed or viability of system installations. Available until the end certifications, etc. — do they have? of the year 2016 is the 30% federal income tax credit. • Do they have the proper licenses to do the work? This credit effectively reduces the solar installation cost • Any pending or active judgments against their prior by 30%, assuming you pay at least that much in taxes. work? Investigate additional rebates according to your state and • On their website, are there examples of their work? local programs. Credits, grants and loans may be available • Can their equipment be insured? for your project. Visit the Database of State Incentives for There are Internet resources available for reviewing Renewables & Efficiency (DSIRE) atwww.dsireusa.org . contractors. The Better Business Bureau may be a resource, A federal program available for farms and/or rural small too. businesses is offered through the U.S. Department of Financing a solar PV system Agriculture Rural Development. Called REAP — Rural Energy for America Program — the competitive grant First, consider the cost of electricity production from program may provide up to 25% of the project cost through various sizes of solar PV systems. Take into account all a grant, or up to 50% of the project cost through a loan investment costs, incentives, utility payout for excess power guarantee, or a combination of the two. This program has supported retrofitting projects for energy efficiency improvements. Visit http://www.rurdev.usda.gov/BCP_ ReapResEei.html. A valuable resource with tools and templates for preparing a USDA REAP grant application can be found at http:// farmenergy.org/tools/tools-and-templates. Professional grant writers are available for assisting with application preparation. A list may be available from your utility provider, through the Agricultural Marketing Resources Center database, http://www.agmrc.org/, or from a local USDA Rural Development office representative. Paperwork shuffle: Permits, insurance, interconnection agreements, warranties You may need to obtain one or more permits from city or county government offices before installing a system. All code requirements should follow the National Electrical Code. When your installer works closely with a building inspector, it’s likely that the permit process will go more smoothly. Toward the sun: This solar PV array includes instructions on how and when to adjust the system, increasing efficiency and reliability.
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Some insurance companies have policies for on-farm systems. If yours doesn’t, it may be possible for your agent to work with you and an installer to create a policy that will meet coverage requirements. The Indiana Utility Regulatory Commission requires investor-owned utilities to provide interconnection agreements with people wishing to install a solar PV system. Rural electric cooperatives in Indiana do so on a voluntary basis. An inspection should be done as a requirement. Your installer may need to make corrections if problems are uncovered. An inspection may be a prerequisite for qualifying for grants, loans, and other solar rebate Big, small ... just right: Several factors influence the size and programs. scale of a well-planned solar PV installation. Bigger may not be better. Determining the load demand is important. A manufacturer’s warranty should be made available for any malfunctions within at least the first two years References of operation. The warranty should cover parts, labor, and removal of defective components, shipping, and Jung, J. and W. E. Tyner. 2015. Economic and Policy reinstallation. Some manufacturers provide a longer Evaluation of Solar Energy for Indiana Business and warranty period. Read the warranty thoroughly and be sure Residential Applications. Purdue University, Agricultural there is a mutual understanding with the installer of the Economics, West Lafayette, Indiana. (Online), available solar PV system. at https://extension.purdue.edu/extmedia/RE/RE-9-W. pdf at retrieved August, 2015 Helpful resources NREL. 2004. A Consumer’s Guide, Get Your Power Purdue Extension renewable energy website: https://exten- from the Sun. National Renewable Energy Laboratory. sion.purdue.edu/renewable-energy/solar-energy.shtml [Online], available at http://www.nrel.gov/docs/fy04o- National Renewable Energy Laboratory, National Center sti/35297.pdf at retrieved December, 2014. for Photovoltaics : www.nrel.gov/ncpv NREL. 2014. Solar Energy Basics. National Renewable U.S. Department of Energy Solar Energy Technologies Energy Laboratory. [Online], available at http://www. Program: www.eere.energy.gov/solar nrel.gov/learning/re_solar.html at retrieved December, Database of State Incentives for Renewable Energy 2014. (DSIRE): www.dsireusa.org USDA. 2014. USDA Rural Development Rural Energy for USDA Rural Development Rural Energy for America America Program (REAP). [Online], available at http:// Program (REAP): http://www.rurdev.usda.gov/BCP_ www.rurdev.usda.gov/BCP_ReapResEei.html at retrieved ReapResEei.html December, 2014. www.Farmenergy.org eXtension Solar Energy in Agriculture Resources http:// Visit
Jan. 2016
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